eBay Motors account at center of breach of contract lawsuit between auto companies

PHILADELPHIA – A wholesale car business has filed suit in federal court against an auto marketing group, claiming it unjustly acquired and used the positive feedback associated with an eBay Motors account to further its own professional reputation.

On Monday, Brett Sholder’s (on behalf of Sky Motor Cars) legal action against Todd Myers (on behalf of U-Drive Automobiles) on charges of breach of contract and unjust enrichment was removed to the U.S. District Court for the Eastern District of Pennsylvania, from the Chester County Court of Common Pleas.

The suit says in the late 1990’s, Sholder and Myers began a business relationship where they marketed and sold automobiles through the online auction website, eBay. In 2002, Sholder formed “Brett Enterprises” which began to conduct itself as as a wholesale car business named “Sky Motor Cars” in 2007.

Meanwhile, in 2006, Myers and TRM Auto Brokers formed “TRM Auto Group”, which marketed car dealers’ inventory online, and opened an eBay Motors Account to conduct the company’s marketing activities.

In January 2007, Sholder purchased TRM Auto Group from Myers, which he says included acquiring the eBay Motors Account. Due to the presence and recognition of the TRM Auto Group brand, the company continued to do business under that name for a long period of time before ultimately changing the name to Sky Motor Cars.

Myers began to work for the plaintiffs on an informal basis after the sale and retained control of the eBay Motors Account, even though it was used exclusively for the marketing and sales of the plaintiffs’ inventory. The account garnered a large number of positive feedback, as a result of the plaintiffs’ sales.

On Aug. 20, 2012, Myers and TRM Auto Brokers, allegedly adopted the plaintiffs’ business model and opened up a separate company named “U-Drive Automobiles”. In January 2013, Myers ceased affiliation with the plaintiffs and appropriated the eBay Motors Account exclusively for use for U-Drive Automobiles.

The plaintiffs allege 312 positive reviews on the eBay Motors Account, earned over a 14-year time period due to the plaintiffs’ sales, are now being used by the defendants to unjustly enrich themselves and their own separate business.

“U-Drive illegitimately relies on these reviews to create customer confidence, bolster its sales and advertise itself as a purple-star power seller, an eBay Motors designation of distinction,” the suit says.

The plaintiffs further stated they have made multiple attempts to transfer these 312 reviews to their new eBay Motors account, but these efforts have proven unsuccessful.

According to the plaintiffs, they were forced to open their own eBay Motors account, which currently does not have nearly the same number of positive reviews. This is designated by the new account currently holding an entry-level power seller ranking of blue, whereas the first account has a far superior ranking of purple.

The plaintiffs claim to have paid in excess of $378,000 for the transactions associated with the first eBay Motors account and are unable to receive any benefit from its prior sales and corresponding positive feedback, while the defendants are “unjustly reaping the rewards”, according to the complaint.

The plaintiffs are seeking actual damages, compensatory damages, incidental damages, consequential damages, costs, interest and other relief in this case.

The plaintiffs are represented by Lance Rogers of Rogers Castor, in Ardmore.

The defendants are represented by Joseph Zaffarese of Ahmad Zaffarese, in Philadelphia.

U.S. District Court for the Eastern District of Pennsylvania case 2:16-cv-01280